If my ex-husband took out a life insurance policy on my stepfather, do I have any rights to the proceeds?

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If my ex-husband took out a life insurance policy on my stepfather, do I have any rights to the proceeds?

We were married. All payments were made during that time.

Asked on July 31, 2011 Iowa

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Assuming your former husband had a life insurance policy taken out on the life of your step-father, the main issue is whether or not your step-father allowed the policy to be taken out on his life and secondly, who is the insurance policy's beneficiary?

Most states have laws that for a person to take a life insurance policy out on a particular person's life, there must be an allowable insurable interest. This requirement prevents people from taking life insurance policies out on the lives of people unless there is an agreement allowing the placement.

Assuming your step-father allowed your former husband to place this policy of insurance on his life and payments were made while you were married using community money, and you were divorced in a community property state, you potentially could have a claim to any insurance payments on this life insurance policy on a declining basis even if you are not a named beneficiary under it.

Rationale: Some premium payments were made during your marriage with community money but premium payments continue by your former husband with his own separate money post your divorce under the same life insurance policy.

 

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I am unsure why your ex-husband took out a life insurance policy on your step-father, but you are not automatically entitled to the proceeds. If you are not listed as a beneficiary, you would not be entitled to the proceeds. If you are able to cancel this policy and any monies earned as interest in the account were incurred during the marriage, you might be entitled to some of those. You may wish to discuss with your legal counsel (divorce attorney) about these costs and possible assets incurred during the marriage (after the wedding and prior to any separation). Hopefully, it will be something you might be able to be added to as beneficiary if this is your step-father's wish. Otherwise, you would only be really entitled to any interest accrued on the account if your husband was allowed to withdraw from the account or cancel it.


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